Sequester cuts starting to take their toll

April 10, 2013

By

Russ Olivo

WOONSOCKET â Social service agencies in the city are bracing for a rise in demand for assistance with food, shelter and other supports as federal sequester cuts begin taking a toll on extended unemployment compensation at the end of the month.
About 1,120 city residents receive the federal Emergency Unemployment Compensation benefits, which is about 14 percent of the total statewide, according to the state Department of Labor and Training. The average EUC check is $377 a month and will shrink by about $47.
Woonsocket beneficiaries will probably see somewhat smaller cuts, said DLT spokeswoman Laura Hart. But itâs because their checks are generally smaller to begin with, as the cityâs median income is lower than the statewide median.
âI think the good folks of Woonsocket have been hit harder by the recession than the state on a whole,â said Hart. âWeâve seen it in Pawtucket and Providence, too.â
Ben Lessing, the executive director of Family Resources Community Action Program, says the cuts are going to be a major setback for individuals struggling to get by now.
âItâs going to send more people into poverty,â said Lessing. âWeâre going to see more customers at our Family Support Center looking for assistance with food, utilities, housing. Weâre going to see more people who are at risk of homelessness. And it wasnât that long ago that many of these people were gainfully employed.â
Citing the effects of federal sequestration, the DLT announced weeks ago that weekly benefits for the Emergency Unemployment Compensation program would be reduced by 12.2 percent, starting April 21. The cuts wonât show up in beneficiariesâ paychecks until a week after claimants accrue the benefit, or April 28.
The program offers a federal extension of the stateâs unemployment program, which that maxes out at 26 weeks. EUC provides an additional 47 weeks â nearly a full year â of unemployment benefits.
A total of 8,000 claimants in Rhode Island will be affected in Rhode Island, but the statistics suggest Woonsocket will be hit especially hard.
While the state continues to have one of the highest unemployment rates in the nation â 9.8 percent â Woonsocket has one of the highest unemployment rates within the state, about 11.5 percent, according to the DLT.
EUC has helped buoy thousands of Rhode Island residents economically during a period when the economy isnât creating many new jobs, but the program could disappear at the end of December, according to Hart.
âIn fact it was slated to go away last December as well, but it was resurrected, and that could happen again,â she said.
The sequester has become the official term to describe a series of small budget cuts to a wide range of programs set to take effect automatically, in a deal reached between Congress and President Barack Obama more than a year ago. They are kicking in now, after Congress and the President could not agree on an alternative approach to budget-cutting.
The White House issued a statement tallying up the cost of the sequester to Rhode Island at more than $40 million, much of it in the form of furloughed military salaries. But other rollbacks would hit social programs that affect children, the elderly and the disabled.
Among other things, the White House predicted the sequester would result in cutbacks including:
â˘ $2.4 million in funding for primary and secondary education, or enough to pay for about 30 teachers and aides.
â˘ The elimination of funding for about 200 seats in the early childhood education program, Head Start.
â˘ About $188,000 in funds that provide meals to seniors, including the Meals on Wheels program.
â˘ The elimination of about $126,000 for job search and employment training, which means 4,550 fewer people would be served by those programs.
Lessing says he is still keeping an eye on the situation to see how his own agency will be affected. He says he is expecting cuts in the Community Development Block Grant program that are used to provide emergency shelter for the homeless.
Lessing says one of the most troubling aspects of the sequester is that itâs not a blanket cut that takes affect all at once. The cuts are phased in gradually, leading many to falsely underestimate their impact over time.
âIt kind of leads you into a sense of, âwell, itâs not that bad,ââ said Lessing. âWhatâs bad it that is happening on a kind of rolling basis.â